Six Autumn Outliers
Courtesy of Joshua M Brown, The Reformed Broker
So that there’s no confusion, these aren’t predictions or forecasts, they are Outliers. I define an outlier as an event that is unlikely but possible. I’m not betting the farm on this stuff, but I wouldn’t fall out of my chair if any of it happened between now and the end of the year.
Enough hedging, let’s go:
1. Silver Explodes: Gold’s flashier little brother has had a decent go of it of late. Silver prices just broke above the $19.50-ish level for only the third time since November 2009, and you know what they say about "the third time". The big boys are usually buying gold right around now to get ahead of holiday demand and the wedding season in India, meanwhile the yellow metal is within melting distance of its high. If the Slingshot Effect that silver prices experience during gold rallies takes hold, look out above. My outlier here is that silver becomes the must-have investment of the season.
2. GOP Takes the House: It is conventional wisdom that Republicans are going to gain some ground at the mid-term elections this November, but I’m going to go a step further and say that the Dems will lose more than 40 seats and along with them, control of the House. Larry Sabato, a political scientist from the U of Virginia, has been quoted as saying that they could also lose as many as 8 or 9 senate seats as well. This ain’t your Daddy’s Midterms, or maybe it is – there are shades of Newt Gingrich’s Contract with America tour-de-force against Bill Clinton halfway through his 1st term back in ’94. Peeps is pissed right now.
3. Google Buys Twitter: This would be a real outlier if only it didn’t make so much damn sense. What in the hell are they waiting for in Mountain View, CA? They tried to build their own Twittery-thing (Google Buzz, anyone?), it wasn’t terrible but people don’t need two microblogging platforms even if Google’s did have the advantage of being bundled with Gmail. This is a doable deal for Google financially and as incredible a phenomenon as Twitter is, it’s still not a business yet – just a phenomenon. The Googster ($GOOG) could monetize it on Day 4.
4. Ballmer is Audi 5000: He’ll go out like a lamb before this becomes a shareholder revolt thing. The truth is, he had everything to lose, inheriting the reins when he did with Microsoft ($MSFT) at the very pinnacle of its power. But Mayor Michael Bloomberg inherited New York City after Rudy Guiliani had ushered in the Big Apple’s Platinum Age and somehow Bloomberg managed to actually improve things. Ballmer didn’t. He’s never been in touch with the kids, doesn’t have a particularly impressive vision, is not possessed of much imagination and he’s not a consumer tech guy. The anti-Steve Jobs will resign and the board will find a consumer-oriented CEO to replace him. Bill Gates will not be looking to pull a Michael Dell and return to "save the company"; I think he likes his story exactly the way it reads now.
5. Android Rules: The market share gains for Google’s Android Operating system move from the nascent stage of hotness to the explosive, Jack-Black-in-2005 phase. Verizon stores nationwide continue to push Android phones in the absence of an iPhone product and instead of the now-stale BlackBerry brand. The mobile handset makers that are not called Apple ($AAPL) have found their Holy Grail, with Android phones taking a respectable 25% market share this past August. The push by these handset makers to legitimately compete with the iPhone juggernaut will be ramped up throughout the fall and market share will be gobbled at a blistering rate (sorry, Research in Motion $RIMM). I’ll stop short of predicting outright supremacy over either BlackBerry or iPhone this fall, my outlier here is that Android is about to become the one that haunts both of them.
6. IMAX, Netflix in Play: There are very few entertainment platforms that haven’t had their throats ripped out by the internet, these are two of them. There is nothing the internet can do to disrupt the IMAX ($IMAX) experience, one cannot replicate a 70 mm viewing experience in their basement. Ditto for Netflix ($NFLX) which saw the digital delivery threat years ago and made arrangements to be a big player for the post-DVD world. These two businesses are the belles of the ball because of their web durability – and they will be chased by media companies into the end of the year.
What are your Outliers for the Fall of 2010?
